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In the wake of many companies declaring they will cut hours for workers to avoid having to offer them health plans, I'm wondering if we screwed up in health reform. Instead of employing one person for 40 hours, can't employers simply pay two people working 20 hours each and avoid costs? That is what I've been hearing and it is very troubling.

Perhaps we should have tied it to a percentage, like say, providing healthcare for at least 90% of your employees or paying penalties. Or incentives- lower corporate tax rates for businesses who insure enough workers.

This seems like a major loophole. I KNOW these companies can afford it (as the mandate only applies to businesses of 50 or more employees) and yet I also KNOW they will try and dodge it.

Someone talk me down if you can.

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Comment Preferences

  •  Tip Jar (6+ / 0-)

    Romney: Believe in (half of) America

    by kmoros on Sun Nov 11, 2012 at 11:52:53 AM PST

  •  Let these employers go this way - (3+ / 0-)
    Recommended by:
    Bush Bites, cassandracarolina, Lujane

    it will strengthen the argument that a public option is needed.

    Employers make money off of their insurance plans. Let's kick them out of the business of picking what level of healthcare workers HAVE to pay for.

    •  I don't think it's true (4+ / 0-)

      that employers make money off their insurance plans. They do get tax advantages, but that doesn't make up for the cost.

      And I don't see how the public option would help for people who are making part-time wages and can't afford to pay for health insurance themselves. A massive shift towards part-time work (if it happens) would be a strong argument for single-payer, not for the public option, imho.

      Let us all have the strength to see the humanity in our enemies, and the courage to let them see the humanity in ourselves.

      by Nowhere Man on Sun Nov 11, 2012 at 01:04:54 PM PST

      [ Parent ]

      •  I think they do (2+ / 0-)
        Recommended by:
        Lujane, cynndara

        because the part the employer's pay is part of the employee's compensation.

        Part-time workers who buy their own health insurance don't get the tax advantages that an employer gets.

        You may be right about single payer.

        I'm in favor of portable health insurance. If people who start a new job were not obliged to sign up  with the employer's plan, employer sponsored health insurance would get better in a hurry.

        And likewise, when employees can choose some other insurance plan, when there's no tax advantage for the employer we might see some real competition.

        •  A tax deduction is not the same ... (2+ / 0-)
          Recommended by:
          Lujane, debedb

          as a tax credit.  A deduction only returns a percentage of the cost of a deduction to your pocket.  A credit effectively rebates 100% of the cost.

          And neither a public option nor single payer will have any impact on the swiftly growing cost of medical care.  The only way to impact that is to regulate its costs, but doing so will only drive care providers and device manufacturers into different markets.

          "Two things are infinite: the universe and human stupidity, and I am not sure about the universe." -- Albert Einstein

          by Neuroptimalian on Sun Nov 11, 2012 at 01:40:53 PM PST

          [ Parent ]

          •  What different markets? (1+ / 0-)
            Recommended by:
            LilithGardener

            Providers don't make money if they don't sell their services.  A single-payer plan creates a monopoly at the buyers' end, enforcing price controls on a provider market that currently holds all the pricing power and behaves with a combination of professional arrogance and profiteering capitalism.  A public option leads to a single payer, as a public provider will quickly out-compete private-sector plans that siphon 20% of their receipts into executive salaries and stockholder dividends.

            Given that Einstein is correct however, it's no wonder that the U.S. has been unwilling to adopt either public option or single-payer for the last fifty years.

        •  medicare for all is the most portable with the (3+ / 0-)
          Recommended by:
          LilithGardener, cynndara, debedb

          least paperwork.

          •  And people can buy some other policy if (2+ / 0-)
            Recommended by:
            nuclear winter solstice, debedb

            they want to. I hate this idea that you have to buy your employer's chosen policy, or your spouse's employer's policy and those are you only options.

            No other insurance is marketed to a captive market that way.

            •  Not only that, but if you are sick or hurt, how do (2+ / 0-)
              Recommended by:
              LilithGardener, cynndara

              you pay the premiums? Seems like employers should be forced to cover it for you until you are back on your feet...It's attachment to the job in the first place that is wrong. And as I understand it, the history says that the only reason connecting the two is from wage freezes that required employers to find some other way to entice workers to their factories. Not so enticing anymore- actually it's enslaving, since it's the thing that forced my hubby out of his small business and into working for the man again. Good thing, too, since he finally got a full physical and then had an emergency appendectomy.

              •  The history (1+ / 0-)
                Recommended by:
                nuclear winter solstice

                in this country.  In Germany, where employer-paid insurance is virtually universal, it was mandated by law under Kaiser Wilhelm as one of many reforms to stave off a Socialist revolution.  Companies in Germany don't play these games of cutting hours and hiring full-time workers as "part-time" or "independent contractors" in order to avoid paying health insurance, and provider costs are better regulated as well.  The benefits of a powerful and patriarchal state that has no qualms about using its powers.

        •  er, what? (0+ / 0-)
          because the part the employer's pay is part of the employee's compensation.
          Huh?
  •  It's bullshit (2+ / 0-)
    Recommended by:
    Bush Bites, cassandracarolina

    It's less expensive for them to pay one worker even with the slight increase in health care costs than it is for them to pay two workers without. And if they do cut back on hours, then they're stupid and their businesses will fail. So I say, go ahead, idiots, put yourselves out of business. lol.

    •  It is NOT less expensive to pay ... (1+ / 0-)
      Recommended by:
      debedb

      two employees if the employer is not paying for insurance.  And they won't go out of business because their profit margin will increase considerably.

      I predict that soon hardly any employer will pay for insurance, they'll simply give full-time employees a couple of hundred extra dollars per month and let them fend for themselves.

      "Two things are infinite: the universe and human stupidity, and I am not sure about the universe." -- Albert Einstein

      by Neuroptimalian on Sun Nov 11, 2012 at 01:45:14 PM PST

      [ Parent ]

      •  One reason it is more expensive to hire (0+ / 0-)

        two part time employees than one with more hours is that the employer pays state unemployment insurance based on employees' wages.  For example, in Maryland they pay on the first $8500; in Wisconsin they pay on the first $13000 of wages; New Jersey charges on the first $30,000.  Rates vary by state as well as the employer's claims history and can go from 0.1% to as high as 13.5%.  In addition the employer pays Federal Unemployment tax on the first $7000 of each employee's wages, at a rate varying from .6% to 6.2%.

        •  The cost of unemployment insurance ... (0+ / 0-)

          is a pittance compared to the cost of medical insurance.  Also, the higher UI rates are only paid by employers who've laid off lots of employees in the past.  In other words, the higher the lay-off rate, the higher the UI rate (generally).

          "Two things are infinite: the universe and human stupidity, and I am not sure about the universe." -- Albert Einstein

          by Neuroptimalian on Sun Nov 11, 2012 at 05:02:32 PM PST

          [ Parent ]

          •  I would think a place like Papa John's (0+ / 0-)

            would not have the lowest of rates.  Rates are also affected by more than just lay-offs.  In our case, our rate went from .1% to 3.3% for three years when a former employee claimed unemployment.   He had quit working for us to take another job, then was laid off from that job.  We actually would have been glad to have him back but he had moved out of the area.  Even though I wrote to the state unemployment commission and said we would re-hire him, our rate still went up.

            •  That's just ridiculous! (1+ / 0-)
              Recommended by:
              Lujane

              That's an extreme increase, especially given that it's purportedly related to just one employee, and one that you didn't lay off yourself.  What on earth is the world coming to?

              "Two things are infinite: the universe and human stupidity, and I am not sure about the universe." -- Albert Einstein

              by Neuroptimalian on Sun Nov 11, 2012 at 09:07:41 PM PST

              [ Parent ]

    •  wrong. it's happening everywhere and poeple are (0+ / 0-)

      spending extra time and transportation costs to shuttle between two or three small jobs. If people haven't noticed this yet they sure haven't been looking for work around here.

  •  There is no employer mandate (5+ / 0-)

    They just have to pay a fine if they don't offer it to full time employees and those employees are covered by a government option.  This is all noise.  The fine is $1,000/year for the first 30-50 employees and $2,000/year for each employee beyond that.  Companies with less that 30 are nt subject to the fine.  In other words, the government is no longer subsidizing the cost to care for low-paid employees 100%.  Employers have to kick in some instead of just the taxpayer.  

    There are cons to having too many part-time employees - administrative costs, hr costs, training, turnover, uniforms etc.  

    Most of this is just cry-baby noise.

    •  The more I think about it, the more I think... (1+ / 0-)
      Recommended by:
      Lujane

      ...the majority of these complainers will just suck it up and pay the $1,000-$2,000 a year.

      First of all, it'd be more expensive to juggle two part timers than just to pay the thousand bucks.

      Second of all, they'll probably be able to deduct the fine anyway.

      Show us your tax returns !!!!!!

      by Bush Bites on Sun Nov 11, 2012 at 12:35:05 PM PST

      [ Parent ]

      •  Employers already pay FAR more ... (1+ / 0-)
        Recommended by:
        Lujane

        than $1,000 a year per employee per year.  They'd save a lot of money by simply paying the fine.

        "Two things are infinite: the universe and human stupidity, and I am not sure about the universe." -- Albert Einstein

        by Neuroptimalian on Sun Nov 11, 2012 at 01:47:26 PM PST

        [ Parent ]

  •  They have been skirting what they pay by doing (5+ / 0-)

    this cut the hours thing for years.  Why do you think there re so many part time jobs?

    They use this to avoid UI too. Though rules vary by state, often if you loose your hours you are technically still employed, tho unable to earn a surviving amount.  You can't quit and you can't collect. :-(

    Be the change you want to see in the world. -Gandhi

    by DRo on Sun Nov 11, 2012 at 12:12:18 PM PST

    •  My daughter experienced that several years ago (3+ / 0-)
      Recommended by:
      DRo, Bush Bites, Lujane

      when working for the Cheesecake Factory.  She had great health benefits which employees working 25 hours a week or more were entitled to.  When the economy crashed, her employer cut everyone's hours to about 22 hours a week and they hired more people.  I would get these frantic calls from her that she received an invoice for her insurance premium that she couldn't pay on her reduced income.  I would have to send a check overnight express to the main headquarters in Texas (we are on the east coast).  They always gave her just a day or two of turnaround time.  It was a real racket.

      “It is the job of the artist to think outside the boundaries of permissible thought and dare say things that no one else will say."—Howard Zinn

      by musiclady on Sun Nov 11, 2012 at 12:25:19 PM PST

      [ Parent ]

  •  Yeah, I'm not sure. (2+ / 0-)
    Recommended by:
    cassandracarolina, Lujane

    I guess many part-time employees will be buying insurance on the open market.

    I forget the percentages now, but if they're at a certain income over the poverty level, they will get assistance for purchasing it. Or they'll just pay the penalty.

    Guess Papa Johns full-time employees don't get health insurance now so, you know, it's a crappy, bottom-of-the-barrel job now. Will part-time make it even crappier, bottom-of-the-barrel? I guess, but it's kind of a matter of degrees.

    In any case, I think Papa Johns will learn that maintaining a part-time workforce is more expensive than hiring a full-time one, especially if the economy continues to improve.

    Show us your tax returns !!!!!!

    by Bush Bites on Sun Nov 11, 2012 at 12:18:53 PM PST

  •  tough talkers, but will they really cut their own (0+ / 0-)

    Throats? Me thinks they may do something for the poor me effect but they know they are lying. But the ones that pull this shit are off my list.

    Speaking of lists, the few I have seen are phoney. Lots of companies that already have health insurance.

    A danger foreseen is half avoided.

    by ncheyenne on Sun Nov 11, 2012 at 12:22:38 PM PST

  •  Full Time Employee and Full-Time Equivalent (5+ / 0-)

    The  ACA defines Full-Time Employee as anyone who works over 30 hours per week.  It also defines what is called the Full-time Equivalent.  To determine the FTE, you take the total hours worked in a month by ALL non-full-time employees anhd divide that by 120.  

    For example, if you had two part-time employees working just 25 hours per week (100 hours per month each), the total  hours would be 200.  Divide by 120 ( 200/120 = 1.6) Therefore, the FTE is 1.6.

    So, those two part-timers count as 1.6 full-time employees.  This prevent an employer from just hiring people for less than 30 hours per week and not having their hours count towards full-time.  An employer with a few employees might be able to make this work for them, but in reality in won't help much.  

    Plus you must consider that the ACA penalty is not tax deductible, but health care costs would be.  

  •  Um yeah- that's exactly how it is for a whole lot (1+ / 0-)
    Recommended by:
    cynndara

    of us working "part-time..." Already been done across the country but only now getting some real attention.

    ...can't employers simply pay two people working 20 hours each and avoid costs? That is what I've been hearing and it is very troubling.
    And that's why I say let's take their business charters away. If they can't pay a living wage which includes enough money to pay rent, buy food, and get some healthcare, then you don't get to do business here in America. The people administering these programs for food stamps etc KNOW where you work and for how much. Medicaid and Foodstamps can aggregate the cost to each employer and send them the bill as far as I'm concerned. Walmart does not need Wealthfare  from the taxpayer.  I do NOT begrudge help to people in need. I do resent the fact that we-the-people are allowing rich corporations to do it on our backs.
  •  Terrible loophole but.... (0+ / 0-)

    It just might help stimulate the economy, giving two people a job instead of one.  It may not be at a living wage, but it can be supplemented by food stamps, heating assistance etc. And also these people will then be eligible for Medicaid due to being under income guidelines. This will not only increase support for these important programs, but will also bring more political pressure for an increase in minimum wage.  Don't get me wrong, I don't think it's great by any means.  But it is a silver lining.  By the way, I used to get Papa John's pizza at least once a month.  Already began my personal boycott when he tried to threaten a pizza price increase to influence the election.

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